Dodd v. Louisville Bridge Co.

• Decision Date: 15 April 1904
• Citation: 130 F. 186
• Parties: DODD et al. v. LOUISVILLE BRIDGE CO. et al.
• Court: U.S. District Court — Western District of Kentucky

130 F. 186

DODD et al. v. LOUISVILLE BRIDGE CO. et al.

United States Circuit Court, W.D. Kentucky.

April 15, 1904

W. O Harris, Kohn, Baird & Spindle, and Dodd & Dodd, for plaintiffs.

Lawrence Maxwell and Helm, Bruce & Helm, for defendants.

EVANS District Judge.

This suit was brought in the state court in 1897 by certain individual holders of the capital stock of the Louisville Bridge Company against that company and various railroads that for many years had used its bridge. Without going into details, it will suffice to say, in general terms, that the defendant railroads had used the bridge under an arrangement probably first made in 1877, by the terms of which they were to pay tolls sufficient to accomplish several objects-- such for example, as paying for maintenance and repairs, operating expenses, and semiannual dividends to the stockholders of the bridge company of 6 per cent. Stipulations were made by which a plan was devised for ascertaining at certain periods the tolls to be collected. In process of time the directors of the bridge company lowered the dividends to 4 per cent semiannually. The plaintiffs alleged that the Pittsburg Cincinnati, Chicago & St. Louis Railway Co. (hereinafter called the 'P.,C.,C. & St. L. Ry. Co.') owned the majority of the stock of the bridge company, elected all its directors, and had, by virtue of these and other circumstances, wrongfully lowered the dividends, withheld the payment of its own tolls, and in other ways had injured the individual stockholders of the bridge company, which would not and could not remedy the troubles, because it was dominated by the P.,C.,C. & St. L. Ry. Co. The plaintiffs claimed that the bridge company was entitled to over $2,000,000 in this way, which it would not collect, and hence the individual plaintiffs brought the suit. The action went to trial in the state circuit court some years ago, and in the main the judgment of that court was favorable to the plaintiffs, but on appeal to the Court of Appeals the amount recovered was reduced perhaps to one-tenth of what the circuit court had adjudged; the Court of Appeals, among other things, holding that the directors of the bridge company had a right to lower the dividends to its stockholders. Meantime the Louisville & Nashville Railroad Company had brought a suit against the bridge company for large sums alleged to have been charged to it in excess of what it would have had to pay if the other railroad companies had paid in full. Judgment was ultimately rendered in this case in favor of the plaintiff for many thousands of dollars. After the return of the case now before us to the state circuit court, amended and supplemental petitions were filed, to which reference will be made as we proceed, and by which it was sought to compel the P., C., C. & St. L. Ry. Co. to pay in this case a large part, if not all, of what had been recovered by the L. & N. R. R. in its suit, and certainly as much as $144,000. After the filing of the last of these amended and supplemental petitions, the case was removed to this court, and the plaintiffs have moved to remand it.

I have quite laboriously examined both the exceedingly voluminous record brought here by the removal of this action from the state court and the very interesting and important questions involved in the motion to remand. The suit was brought and prosecuted under the modes of procedure prescribed or allowed under the Kentucky Code of Practice. That procedure, while different from the practice in equity causes originally brought in the federal courts, is nevertheless to be entirely respected by this court, as to steps taken in the state courts up to the time of the removal. It follows as a result of this general proposition that it must be assumed that the plaintiffs had the indubitable right to sue in their own names in the state court to enforce the various equitable rights asserted in their numerous pleadings filed in the cause. Some of those pleadings were filed as matter of right, and some of them by the express leave of the state court. We must assume that this was all proper, and prima facie, at least, that the plaintiffs have a right of action in their own individual names in seeking an enforcement of the demands they have asserted in their pleadings. The Kentucky Code of Practice prescribes when and how amended and supplemental pleadings may be filed, and upon the pending motion this case comes to use with those pleadings properly in the case, and properly presenting a claim by the individual plaintiffs against the P., C., C. & St. L. Ry. Co. The plaintiffs were, I think, required by the Kentucky practice to make the Louisville Bridge Company a party defendant. It was made such in the original petition, and appears to have taken up and to have continued the fight against the plaintiffs with considerable vigor. The supplemental and amended petitions, filed respectively July 16, 1903, October 15, 1903, and February 25, 1904, were each entitled in the cause, and no one of them made any change of parties. No parties, as such, were newly named in them, though relief was mostly, if not altogether, sought against the P., C., C. & St. L. Ry. Co. Opposition to the filing of one or more of the three last-named supplemental pleadings was made, and this fact, under the Kentucky practice, was equivalent to appearance thereto; and, indeed, under that practice, if no new cause of action was set up, no additional appearance was necessary, the original appearance being sufficient.

Strong arguments were made on either side of the question of whether the last amended petition covered a new cause of action then for the first time asserted in the case against the P.,C.,C. & St. L. Ry. Co., and thus presenting a separable controversy in such time and form as to make the case removable, or whether the cause of action asserted in the amended petition filed October 15, 1903, which cause of action may possibly have been asserted, or at least foreshadowed, in earlier pleadings, though in all of them in a vague and general way, was only made definite and specific by the amendment of February 25, 1904. If the last amendment was only a better and more definite presentation of the cause of action theretofore attempted to be set up in the pleading of October 15, 1903, and possibly at various other times, by other pleadings filed in the cause, then the petition for removal came too late, because the time for answering the amended petition of October 15th was nearly or quite exhausted when the defendant answered the pleading in the state court on the 29th day of October, 1903, and the petition for removal was not presented until the succeeding March.

There may be much room for discussion upon all the questions thus indicated, and possibly the motion to remand might be decided by solving those questions; but, without at present attempting to solve them, I have, with some hesitation and doubt, reached the conclusion that the motion to remand can be determined upon another and possibly clearer ground.

Referring again to the very important factor that the plaintiffs had the right, as has been determined in this case by the Kentucky Court of Appeals, as well as by the chancery branch of the circuit court, to bring the action in their own names for the assertion and enforcement of their rights against the P., C., C. & St. L. Ry. Co., regardless of whether the bridge company joined with them as a plaintiff or not, it is found to be the fact that one of the plaintiffs, to wit, Mrs. Blakemore, is a citizen of Illinois, and that the defendant the P., C., C. & St. L. Ry. Co. is also a citizen of that state. The original petition for removal asserts that the P., C., C. & St. L. Ry. Co. is 'a resident and citizen of the states of West Virginia, Ohio, Indiana, and Illinois, being a corporation chartered and organized under the laws of said states, and not under the laws of the state of Kentucky. ' The petition for removal makes a statement respecting the citizenship of the various plaintiffs, but, as the evidence shows that one of them is a citizen of Illinois, the grounds for removal are fatally defective for that reason, unless saved either by an amendment to the removal petition presently to be referred to, or by the legal effect of the following statement in the original petition, viz.:

'All of the plaintiffs in said suit, except the Louisville Bridge Company, are stockholders of said bridge company, and they brought their said suit in the right of and for the benefit of the said Louisville Bridge Company, and any recovery which they sought was a recovery by and in the sole interest of said Louisville Bridge Company. The Louisville Bridge Company is a corporation chartered and organized under the laws of the state of Kentucky, and not elsewhere, and is a resident and citizen of said state, and was so at the beginning of the said suit, and has continuously been so since, and is now, and is not a resident or citizen of any other state.'

Do those statements, even in the light of cases like Southern Ry. Co. v. Allison, 190 U.S. 326, 23 Sup.Ct. 713, 47 L.Ed. 1078, remedy or obviate the defect referred to, in view of the facts already noted as to the adjudicated right of the plaintiffs to sue individually, and especially as the importance of that right in this case has been illustrated and emphasized by the defense against their suit actually made on the merits by the bridge company? Can the determination of this question be affected by the answer of the bridge company filed in the case in this court since the removal, even though it might be apparent therefrom that its attitude to the plaintiffs had in fact been radically changed? Answers to these questions may depend upon what...